Braman doesn’t buy that logic. Earlier this month, he told The Herald that the layoffs “were a real tragedy that never should have happened. ... The people at the top were very much more interested in flash than substance.”

Jackson and

UM med school: inextricably entwined — and now troubled

UM and Jackson are among the region’s biggest employers and most crucial institutions. But both are now troubled. Jackson has lost $419 million the past three years.

UM has placed tremendous emphasis on its medical school, which in fiscal 2011 had $1.7 billion in revenue, according to a medical school financial report. The whole university generated $2.3 billion in revenue, according to UM’s audited statements.

Mark Rogers, a physician and former Duke University executive who has served on Jackson’s board, says the situation “calls into question the whole economic future of the entire county. ... This applies not only to how residents get high quality healthcare, but also to the aspirations of Miami to become an economic center for the vibrant and growing biotechnology industry.”

Braman put it this way: “This is really a double tragedy — UM and Jackson. And you can’t disconnect the two.” With UM’s purchase of a hospital across the street of Jackson, “taking away paying patients, you can’t underestimate the problems this has caused Jackson.”

The partnership between the medical school and Jackson had generally worked well for years, despite occasional squabbles. For 25 years, the two previous medical school deans grew the institution slowly without layoffs. That changed in 2005, when Shalala announced she had hired Goldschmidt as the new dean, a renowned cardiologist and veteran Duke University administrator, for a $1-million-a-year compensation package.

Goldschmidt quickly began to push for UM to have its own hospital. “World-class doctors like to come to an environment where the university has its own hospital,” he said. In 2007, UM purchased the 560-bed Cedars and renamed it.

Many were skeptical. Myra Hurt, a dean of Florida State University’s medical school, said many universities found owning hospitals to be “financially tricky.’’ Others criticized the purchase price: $275 million. Joshua Nemzoff, a specialist in buying and selling hospitals, was stunned by the amount. “They paid three times what I thought that hospital was worth,” he said. UM used bonds to pay for the hospital plus $50 million in improvements.

Shalala remains a strong supporter of the purchase. In the midst of layoffs in May, she called the hospital “part of the solution,” not the problem.

Last week, Goldschmidt said of the Cedars purchase: “Some things went according to, or better than, plan; some did not,” but the UM hospital has shown improvements in performance metrics and provides “new life-saving care.” Jackson officials had been worried all along. As far back as 2006, Larry Handfield, then chairman of Jackson’s board, looked at UM’s ambitious expansion plans and felt Jackson would be the loser: “My concern is … if they have a hospital where they have to meet their bills, they are going to put a patient in that hospital first, and put one in Jackson second.”